Hi All,
I am new to trading. I am trying to follow some principles based on "value investing". I am starting this thread to post ideas on "value buys". It will be great if people can add their own ideas to the same thread. Also please note I am an individual investor and not any broker promoting any stock or service.
Note that ideas should be such that the stock should be "cheap". Cheap on the basis of reserves per share, cash held per share and such tangible things. It should not be based on hope like "next quarter results will be excellent or the management is doing good job". If such positives do occur, they are a good thing, but do not base your analysis on such points.
You are welcome to criticize any of my ideas.
Here is one I got:
Garware Wall Ropes
GARWALLROP is engaged in the manufacturing of Ropes & Yarns made of nylon and plastic polymers of various sorts and nettings.
P/E: 9 to 10
P/B: 0.85
D/B: 0.51
Promoter holds 55% of the stock, which is a plus.
Pretty much consistent EPS, except for one quarter in Dec 2008, where it was EPS of -2.05. The growth in revenue or profit growth is not spectacular, but I am analyzing it from Net Assets point of view:
a) Net-Net assets per share: 23 Rs
Note I am considering Net-Net assets = (Current Assets - Current Liabilities - Debt)
b) (Reserves – Long term debt) per share: 31 Rs per share
a + b = 54 Rs
Net assets per share: 51 Rs
These calculations are according to 2009 Annual Report, the last quarter results were inline with earlier results.
So given that share trades about 20-25 Rs above the 54Rs (which is (Net-Net Assets + Reserves) with Debt removed twice, to be conservative), it is a bargain. I went through the corporate announcements and did not find any major negatives.
I have bought a small position and see how the stock moves.
- Meghraj
I am new to trading. I am trying to follow some principles based on "value investing". I am starting this thread to post ideas on "value buys". It will be great if people can add their own ideas to the same thread. Also please note I am an individual investor and not any broker promoting any stock or service.
Note that ideas should be such that the stock should be "cheap". Cheap on the basis of reserves per share, cash held per share and such tangible things. It should not be based on hope like "next quarter results will be excellent or the management is doing good job". If such positives do occur, they are a good thing, but do not base your analysis on such points.
You are welcome to criticize any of my ideas.
Here is one I got:
Garware Wall Ropes
GARWALLROP is engaged in the manufacturing of Ropes & Yarns made of nylon and plastic polymers of various sorts and nettings.
P/E: 9 to 10
P/B: 0.85
D/B: 0.51
Promoter holds 55% of the stock, which is a plus.
Pretty much consistent EPS, except for one quarter in Dec 2008, where it was EPS of -2.05. The growth in revenue or profit growth is not spectacular, but I am analyzing it from Net Assets point of view:
a) Net-Net assets per share: 23 Rs
Note I am considering Net-Net assets = (Current Assets - Current Liabilities - Debt)
b) (Reserves – Long term debt) per share: 31 Rs per share
a + b = 54 Rs
Net assets per share: 51 Rs
These calculations are according to 2009 Annual Report, the last quarter results were inline with earlier results.
So given that share trades about 20-25 Rs above the 54Rs (which is (Net-Net Assets + Reserves) with Debt removed twice, to be conservative), it is a bargain. I went through the corporate announcements and did not find any major negatives.
I have bought a small position and see how the stock moves.
- Meghraj
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